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Do Homes Purchased With a VA Loan Have Warranties?

New VA homeowners often wonder how they can safeguard their home investment. A home warranty is one option that allows homeowners an additional layer of protection.

A home warranty provides coverage for the repair or replacement of certain home systems and appliances if they break down due to normal wear and tear. These typically include items such as the furnace, HVAC, plumbing and electrical systems.

VA loan borrowers can significantly benefit from home warranties, as you’ll only need to pay for the service call rather than the full cost of repairs.

VA Home Warranty Guidelines

Homebuyers might assume they must protect their home purchase with a warranty, but the VA only requires a warranty in specific instances. Existing construction homes one year or older are not covered by a warranty except in certain cases.

For new construction homes, the VA mandates a 1-year builder's warranty or a 10-year insured protection plan. Some builders may also offer supplementary coverage or warranty options.

Home Warranty vs. Home Insurance

Though similar, home warranties and home insurance provide different types of protection for your residence.

Homeowners insurance provides financial protection against losses due to major risks such as fire, hail, property crimes and certain water damages that might affect the entire structure or the homeowner's personal property.

Home warranties generally provide coverage for home components that are not typically included in an insurance policy, such as major systems that may require repair or replacement. Many property owners can benefit by combining a home warranty and homeowners insurance to ensure the most protection.

VA Home Warranty Pros and Cons

Pros Cons
Peace of mind for unexpected repairs Limited coverage depending on the warranty terms and conditions
Protects against buyer complaints for seller Wait time is typically longer since the homebuyer must file a claim
Makes the home more attractive to potential buyers May be assigned to an independent contractor to complete repairs
Most warranties are cheaper than the cost of repairs Bleeds into emergency fund

Should I Buy a Home Warranty?

A home warranty can protect you from the high repair and replacement cost if something goes wrong with your home after closing. However, the specific warranty coverage is limited to what is specified in the agreement and certain exclusions may apply.

It’s important for VA loan borrowers to choose a home warranty company that provides comprehensive coverage for the systems and appliances they wish to protect.